Lloyd Kahn is the editor-in-chiefof Shelter Publications, an independent California publisher.Shelter Publications specializes in books on buildingand architecture,as well as health and fitness.Lloyds latest book is Tiny Homes on the Move: Wheels and Water.For more info, see: www.shelterpub.comLloyd Kahn is the editor-in-chief of Shelter Publications, an independent California publisher. Shelter Publications specializes in books on building and architecture, as well as health and fitness. Lloyd’s latest book is Builders of the Pacific Coast. For more info, see: www.shelterpub.com
Twitter: www.twitter.com/lloydkahn

This is an open letter to the principals in the bankruptcy issue: David Steinberger of Perseus, Gary Rautenstrauch of AMS, Rich Freese of PGW, and Charlie Winton, who's Inextricably Linked, judges and lawyers

We all know the facts. We've all had a cram course in bankruptcy law and seen the horrors and inequities close-up and personal so I'll skip reiteration here.

Here's what you guys should do:

Perseus, you give AMS the full amount of money owed PGW publishers, what is it, 30 million? Isn't it about the amount you'd have paid if you'd come knocking on PGW's door?

You thereby acquire PGW, which is, let us not forget, the plum of U.S. distributors. I mean, CDS and Consortium both did a good job in different ways. But PGW excells. PGW got soul. PGW is the Apple Computer of distributors. (And will be even better when unfettered by AMS.) I can tell you just how good they are, after having been distributed by Random House for 30 years, but that's another story.

Now that Perseus has PGW, you give publishers 100% of what is owed them. Not 50 cents. Not 75 cents. 100 cents. It makes sense. Keep us afloat. We produced and printed and delivered and paid for those books. These amounts are not our profits, they are our receipts. Don't play corporate hardball with us. You'll have to foot the interest on the $$ paid, but you'll get it back. You can afford it. Publishers have to sign on with you for a while.

What does AMS get? They get the same amount of money that bankruptcy courts can cheat all of us publishers out of. The same amount! You can't get any more by tossing PGW publishers to the wolves. Isn't this a no-brainer?

And isn't this an elegant solution for the courts? All us parties are in the same boat. An orderly transfer of funds that puts both publishers and PGW back in business, gets AMS more $$ than they'd get by either selling PGW to someone else or nuking both PGW and its publishers. Minimal legal fees.

****

Written in Cafe Roma 8:30 Thursday morning, 1-11/07, after a sleepless knight and driving into SF across the GG Bridge on a cold clear morning

On December 29, our distributors filed for bankruptcy. I'm writing this up as it's the easiest way to tell everyone I know why things may not be normal around here for a while. There's a cloud over our future.

Our distributor - Publishers Group West (PGW) - the company that sells our books, is owned by Advanced Marketing Services (AMS) and the latter filed a chapter 11 form of bankruptcy. PGW is a great company, with a crew that is savvy, hip, and good at what they do. They had a solid 2006, with strong sales for the 100 or so independent publishers they represent.

AMS, their parent company, is in the business of supplying books to the chain stores like Costco and Walmart and it's a huge business (3/4 of a billion a year). For reasons too complex to discuss here, AMS has been foundering for several years, and when their bankers refused to extend their line of credit last month, they pulled the plug, taking PGW, their one profitable division, down with them.

PGW is the country's largest distributor of independent publishers (as opposed to mega-publishers) and this is a world presently in turmoil. Payments to PGW publishers for the last 4 months of 2006 are presently frozen. For us this amounts to some $280,000 (we had a great last quarter) and it means we no income flow for printing, author royalties, salaries, and operating expenses. Publishing is a marginal business to begin with — our net profit for 2006 was $30,000 — so you get an idea of how this affects us. The publishers I've talked to are trying to borrow money or otherwise figure out how to keep operating.

It's too early to know how it will play out. Things are changing daily. There's talk of someone buying PGW, there's talk of publishers ending up getting 50 cents on the dollar of monies owed. There's other talk of completely losing that money. For of us publishers, it would be catastrophic. PGW has just got court approval to pay publishers weekly for 2007 sales, but 2006 is in limbo. Meanwhile, we owe printers and authors for all those books sold in 2006.

There was a telephone conference of 70 PGW publishers with a bankruptcy lawyer last Friday and some kind of join action is underway. The laws of bankruptcy are chilling. Another publisher I talked to today said, "It's like I woke up and was in the Soviet Union. I wasn't in America anymore." Bankruptcy courts can nullify the contracts publishers had with PGW. Hoo-wee!

As I said, I'm writing this up so anyone we have communication with will understand if we don't respond as quickly as usual. I'm rooting for the people at PGW to pull this off. They're a great company. I want them to survive. They did a great job for us. They're just caught up in a web, and if they can't break loose in the next few weeks (i.e. find a buyer), it's going to be a long, sad trail for a good number of America's independent publishers.

I'll let you know at the first sign of good news.

As of today (Sunday 1/10/06), the Wall Street Journal was gathering info for an article. This is a great story, and I hope Publishers Weekly can get a grip on it.And now for a little news of a different nature:Close Encounters With Wild CreaturesA few days ago I walked out to get some firewood and there was a large egret by the fishpond. He'd just nailed a little fish and he had his beak pointed to the sky as he swallowed it. He wasn't fazed by my proximity, highly unusual for this typically very wary bird. I stood still and watched as he returned his gaze to the pond. Elegant long pencil-thin black legs, long spread-eagled black toes, wispy white feathers. I sneaked back into the house, got Lesley and we watched him through a window for some time. For a few days he flew around the garden and I could get within maybe 40 feet of him. Rare and wonderful.

Check those toes!

Then on Tuesday night I was driving to meet the boys for our weekly run and a beautiful coyote jumped across the road and stood there on the edge of the woods. He was healthy. I ran alone on the beach that night (soft sand for knee injury recovery) There was a full moon so I didn't need my head light. As I came back on a fire road in a marshy area, I passed under a tree where an owl was calling. Uh-ooh-ooh-ooh. I've practiced my owl calls for years and once got an owl to answer me a few times. I stopped under the tree and answered him. Uh-ooh-ooh-ooh. He answered right back. Then an owl across the marsh made the same call. I kept it up. Uh-ooh-ooh-ooh, and right back at me. Then he introduced a variation in pitch and syllables. Uh-uh-ooh-ooh-ooh. I imitated that and and he immediately answered, and his buddy across the marsh did the same and by golly I was talking to a couple of owls! We kept at it for maybe five minutes, back and forth. It was a good week with the animal spirits.